CFOs predict mixed fortunes for 2014

via CFOs predict mixed fortunes for 2014 November 21, 2014

CHIEF financial officers (CFOs) predict mixed fortunes on the performances of companies this year and slight improvement in the next year two years.

A survey conducted by Deloitte&Touche recently on CFOs showed that they had mixed reactions when asked about expectations of companies countrywide.
This is the first time that such a survey been carried out in Zimbabwe.

“No less than 19% of respondents predict significant deterioration in company performance in 2014,with a further 8% expecting a slight deterioration and 27% opting for a continuation of the status quo.

The remaining of 46% expect slight to significant improvement,” Deloitte Partner Ray Campbell said while presenting the results of the survey to journalists yesterday.

Campbell said for 2015 to 2016, CFOs were projecting a slight improvement in company performance.

He said the majority of the CFOs noted that improving current operations was the major focus area followed by investing in new capacity, repayment of debt, retaining liquidity and investing in innovation.

The survey also showed that financial health of primary customers, sustainability factors relevant to industry, competitiveness of the local market, threat of nationalisation and industry regulation and environment were some of the industry concerns.

“The financial health of primary customers was identified as the top industry concern, totalling 54%.This is reflection of the poor state of Zimbabwe’s economy. Retail sales in Zimbabwe slumped 30% in February, compared to the previous month, while 15 factories in the metals and engineering industry closed in the period, according to the country’s government,” he said.

Campbell said the political landscape was named by the majority of Zimbabwean CFOs as the biggest risk to business performance.

“This could be linked to the ongoing nationalisation debate in Zimbabwe. Following President Robert Mugabe’s victory in the national election in July last year, one of the election promises was a stepped-up debate and implementation of local ownership through the indigenisation programme,” he said.

Deloitte partner Tich Mudede said the survey was carried in 15 countries in southern Africa and Zimbabwe had the highest rate of responses this year.

Mudede said the survey was conducted with firms that had a turnover of below $25 million representing 42%, 38% representing companies with turnover between $25-$50 million and 20% representing firms with a turnover above $50 million.